5 Legal Considerations In App Development

As with any other business venture, app developers must keep their eye on their product's critical legal considerations and implications. These considerations are essential to structure the app properly and keep it running successfully.

By now, it’s no secret that apps run our lives; they are everywhere, and the demand for better and faster mobile solutions is increasing widely. Mobile technologies provide unique ways to access goods and services, from buying groceries to getting medical care. As a result, and since late 2016, mobile devices started outselling computers, and in 2021, an increasing percentage (56% to be exact) of internet access happens through mobile devices. These figures come as a godsend for developers who are the ones carrying the torch of modern mobile technologies and their legal considerations. Henceforth, app development is progressively turning into an attractive market and one of the most promising revenue generators for startup companies.

But despite this rising popularity in app usage and app development, creating a mobile product isn’t just about getting a good idea, developing it, and then amassing users and dollars. Aside from the well-known development practices, there are several legal issues that developers must abide by if they want to build a long-lasting product. These legal considerations are non-negotiable, and some, if not handled properly, can jeopardize your company, your product, and your entire livelihood.

As of today, app development faces all the same legal issues as any other business unit. Different laws and regulations apply to the mobile development industry, from intellectual property laws to consumer laws and even app store agreements. Depending on the type of app you’re developing, either all or only some areas of law will apply. It sounds complicated, we know, but worry not; we at Foonkie Monkey have created a comprehensive list of some of the general legal considerations relevant to developing a wholesome mobile app.

Intellectual Property Rights

Intellectual property (IP) relates to all work that is original and created in the process of developing, marketing, and deploying your mobile product. During your app’s development process, you and your team will be creating original designs, graphical content, app names, icons, written content, and source code. When authentic, all these elements are considered IP and are your own. Your company needs to register them as trademarks, copyright, or patents, depending on what type of intellectual property your app deals with.

These are the three ways of assigning IP rights to your app and protecting your creative ideas:

• Copyright

Copyright protection covers your app’s written or artistic work. It protects your original work against unauthorized copying or reproduction of it. This protection often includes source code, original or proprietary images, graphical user interface elements, artwork, and written content.

• Patent

Patent protection covers certain products, processes, or methods embodied within your app that are new and non-obvious. Patenting is not a very common practice among app developers, partly due to patent rights needing long application processes that take years and are very costly. In case your app is not patentable, but some aspect of it is unique and novel, like its source code, Trade Secrets are legal ways of keeping it secret.

• Trademark

The trademark is what identifies the source of origin of goods or services. It often includes protection for things like your app’s name, logo, and slogan. It is standard practice that most development companies that build mobile apps register at least their app’s name as a trademark.

Additionally, we strongly recommend that you write out an IP Assignment Agreement that clearly states that you own whatever work is created when you outsource workers. IP rights are especially relevant if you’re outsourcing personnel to work on some processes when building your app. In that case, you need to legally determine who owns what to make sure your elements are rightfully yours and that you’re not infringing someone else’s copyright. Failing to put together this agreement adequately can result in misunderstandings or legal liabilities like a developer or programmer, for instance, who unintentionally ends up owning parts of your app’s IP rather than the company. Moreover, suppose your app goes to an international market as ours do. In that case, there are global protection strategies you can adopt to protect your company and your app from any infringements overseas.

Lastly, it sometimes happens that an app may contain IP that a third party owns, in which case your company must obtain a license to legally use that IP and get legal clearance to incorporate it into your app.

Terms of Use and Privacy Policy

Firstly, Terms of Use is a legal agreement that app developers enter with their app’s users. This agreement is valid automatically when a user downloads and uses the app. It states what the app is, how the user must use it, what constitutes improper or unlawful use of the app, and the consequences of improper use. A Terms of Use agreement is crucial because it lays out the rules for your app’s proper use and limits the possibility of legal issues for your company if a user misuses your product.

Secondly, privacy policies are vital legal considerations in mobile app development. If your app collects personal data such as names, email addresses, or phone numbers, it needs a privacy policy. Your privacy policy must explain how and for what purpose the app will store and use a user’s data. Such policies must also clarify what rights your end-users have regarding their data. Also, how they can exercise those rights to ensure compliance with data protection and privacy regulations. These regulatory laws depend on the territory where your app will impact users, not necessarily the country where the app development process occurs. Therefore, you must be aware of all relevant global data protection measures. 

While all international laws require personal data protection, the most all-encompassing regulations are the General Data Protection Regulation in the EU (GDPR) and the US Data Protection Legislation (the Federal Trade Commission enforces it). Most regulatory entities specifically require app developers to post their privacy policy within the app, primarily if it handles financial information, protected health information (PHI), or information from children under 13. This point makes FinTech and healthcare app developers especially obliged to comply with data protection laws because sensitive data always falls under stricter requirements in most legislations. These apps require developers to ensure that the user gives explicit, literal consent for processing their data. Non-compliance with data protection can lead to fines and other consequences from the FTC, the GDPR, HIPAA, COPPA, or any different law set covering your app’s purpose and audience.I

These are some of the best practices we recommend for properly enforcing and meeting your privacy policy:

• Have your privacy policy in place from the beginning of the mobile app development process.
• Your privacy policy must be clear, transparent, and accurately disclose any practices regarding collecting, using, and protecting personal information.
• Make it available as soon as the user downloads the app.
• If your privacy policy is provided after installing the app, you must disclose it before the app processes the user’s data.

End-User License Agreement (EULA)

Your app needs an enforceable agreement with its end-users to protect your company’s intellectual property and minimize or eliminate potential liability. This agreement is referred to as the End-User License Agreement (EULA). Enforcing an EULA will protect your IP and your investments because it acts as both a copyright license and a contract. 

It lays out the terms under which the end-user may use the app and identifies all permissible and non-permissible uses. Additionally, an EULA can limit the app developer’s liability and ensure that the end-user won’t misuse the app in a harmful way that could jeopardize or violate the development company’s IP within the app.

As stated above, your EULA must be enforceable, which requires mutual acceptance and means that your app’s users must agree to your EULA if they want to use your app. The most common and effective ways of obtaining a user’s agreement to your EULA are clickwrap or browsewrap agreements. Clickwrap agreements are the most commonly used, and developers disclose them before the app is downloaded. The EULA is presented to the user, requiring them to state that they have read it and then agree to its terms by clicking on the “I Accept” button. 

On the other hand, browsewrap agreements appear as a hyperlink to the app’s terms but don’t require the user to take any affirmative action. On browsewrap agreements, acceptance of the terms is accomplished simply by showing them to the end-user. Lastly, another way to make your EULA is contractually binding is to obtain an agreement after download. Still, this practice is rare since, in paid apps, issuing refunds for users who won’t agree with it after purchase could lead to unnecessary hassles.

Confidentiality Agreements

The app development industry is known for its innovation and constantly breaking new ground regarding new ideas and technologies. Consequently, especially for highly creative app developers, taking the proper confidentiality measures is paramount to protect intellectual property. In most app development environments, confidentiality issues can arise in scenarios where you need to outsource third parties, such as designers or programmers, that have full access to your app’s data. These third parties need to understand your app’s full scope to perform their job effectively, so you can’t always limit access to it, but it’s wise to take measures that ensure they keep your app’s and your company’s information secret. 

In most cases, your hiring policies and practices should ensure that your outsourced personnel is trustworthy, but you can’t fully guarantee that a third party won’t steal your app’s information. Hence, the importance of implementing confidentiality agreements, also known as non-disclosure agreements (NDAs). Generally, mobile app development NDAs restrict information dissemination about a particular project or product and limit the information to the people who have signed the document. NDAs are an easy way to add an extra layer of protection to your IP and avoid, or at least minimize, the chances of your ideas getting stolen.

NDAs are especially useful in the following cases:

• They protect the confidentiality of trade secrets. 

• NDAs protect sensitive information disclosed during the app’s development, such as passwords, databases, prototypes, source code, or business plans. 

• To protect your company from risks when outsourcing personnel who may have also worked with competitors.

• To keep an app secret while under development.

App Store Agreements

Once your app is built and ready for distribution, you need to inform your users that it is available for download. Distribution of mobile apps and their delivery to end-users usually happens through app stores. These app stores typically require developers to agree to the store’s terms in a distribution agreement, which is generally non-negotiable. Some stores are more restrictive than others, and the distribution agreements vary in complexity and requirements. These agreements often include additional usage and compliance policies that can impact your app’s development process, specifications, and distribution, so it’s essential to know these specifications beforehand and adjust accordingly. 

Additionally, some app stores have their EULAs, terms of use, and insurance for liability coverages. These platforms will also reserve their right to modify their legal terms or add new clauses when necessary. Your app must comply with these conditions, even when they change, and failing to do so will end in legal action or remove your app from the store.

Your mobile app must also comply with all app publishing requirements and distribution that arise from Apple’s iOS Developer Program License Agreement and Google’s Google Play Developer Program Policies for Android devices. These guidelines and policies emphasize all sensitive data protection measures and address IP issues concerning your app. 

 

Conclusion

Development companies must protect their rights, clients’ interests, and investments by efficiently and thoroughly addressing legal matters. Establishing adequate legal and compliant strategies is paramount to minimize liability risks inherent from violating others’ IP rights, app store agreements, and territorial laws. As a general rule of thumb, we at Foonkie Monkey recommend that development companies determine their legal scope and address all possible legal considerations from the beginning and the entire mobile app development process. Also, you must understand that there is a lot of detail, ramifications, and legal knowledge involved in each point listed in this article. They all need consideration to ensure your app is sustainable and prosperous. Consequently, if possible, we recommend consulting a lawyer specializing in the app development industry and is knowledgeable in all things tech. This specific type of lawyer can ensure that all parties are fully protected, and your app is legally sound. 

We understand that the last thing in a developer’s mind is legal mumbo-jumbo but keep in mind that taking care of these legal issues beforehand will ensure that you have a hassle-free highway to success. Moreover, the legal aspects listed above don’t constitute an all-encompassing list of legal matters related to app development. Depending on your app and its specifications, more legal issues can arise, or some aspects in this article may not even be relevant to you. Still, as mobile app usage keeps growing, legal requirements applicable to them will likely continue to grow. This growth may also come with greater clarity and alternatives for developers to protect themselves and their users, releasing better apps that will stand the test of time.

At Foonkie Monkey, we are always aware of legal matters concerning our apps and are always at the forefront of the latest requirements and laws to make our products better and durable. If you have any questions about this article or want us to work on our project, don’t think twice about contacting us!

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